Goldman Sachs is a bullish writer on this year’s recovery. But here’s what could go wrong


U.S. stocks are set to start a bumpy week of earnings in a subdued manner.

Apple
AAPL,
1.61%
,
Tesla
TSLA,
+ 0.20%
,
Facebook
Full board,
0.60%

And Microsoft
MSFT,
0.44%

All of these are expected to report earnings in a full week of action that also includes the Federal Reserve’s first policy meeting of the Federal Reserve. in fact, Almost a quarter Out of the S&P 500 will report results – with these companies representing 39% of the index at market value, according to FactSet data.

The epidemic of COVID-19 and Activation of vaccines Across the U.S. remain in focus as President Joe Biden begins work. Investors will also watch closely GDP reading in the fourth quarter in the US On Thursday, when marketers surveyed by MarketWatch expect a 4% rise. Attention will also be drawn to the recovery in 2021.

In ours Today’s call, Goldman Sachs
GS,
+ 0.01%

Analysts were bullish on the U.S. economy’s rebound in 2021, but said there are three major risks to recovery. The investment bank expects a 6.6% gross domestic product growth this year, which is 2.5 percentage points above the consensus. It expected a reduction in virus-induced risk. By mass vaccination, alongside fiscal support for consumer spending to encourage “mid-year consumption momentum” and “very strong growth” in 2021.

The most serious downside risk, analysts noted, was the threat of a new strain resistant to the vaccine of the hormone that causes COVID-19 – requiring a new vaccine and another round of vaccines. “Virus-sensitive expenditures may decline as new vaccine is developed, and although a new vaccine could be approved in less than five months, the consumer momentum may be delayed until 2022,” Goldman analysts led by Jan Haeius said in a comment. They added that preliminary evidence indicated that although the current vaccines protect against the new strain in the UK, they were more involved for the South African version.

The second most risk-related risk is that mutations in the virus “significantly increase the continuum” of herd immunity, either by more infectious or by reducing vaccine efficacy. This scenario will also delay the momentum of consumption. Finally, even when the outbreak of the vaccine and the hot weather reduce the spread of the virus, there is a risk that consumers will be more cautious than expected, although the disadvantage will be limited, they say.

More encouragingly, there were some significant upward risks to Goldman’s GDP growth forecast of 6.6%, including households that quickly spent the savings they accumulated during the COVID-19 epidemic and the impact of further fiscal stimulus in 2021.

The tweet

This is Morgan Stanley
Mrs,
-0.76%

The chart shows the NFIB’s small business optimism index that exceeds the 2000 Brussels
routine,
1.28%

An index, which suggests that while sentiment may be negative, stocks with small capital are on the rise.

The markets

Futures of US stocks
YM00,
-0.43%

ES00,
0.11%

NQ00,
0.96%

Voted slightly higher before opening, at the beginning of the busy week. European stocks also rose in early trading. Aided by profits And reports on purchases from Boohoo online retailers
BOO,
3.33%

And ASOS
ASC,
+ 4.55%
.
Asian stocks climbed overnight, moving on Hopefully some economies Will begin to recover from the COVID-19 epidemic with ease of lock-in and vaccine progress.

The buzz

Both Top assistants began talks With a group of moderate Republicans and Democrats in the Senate on a $ 1.9 trillion virus-infected package on Sunday.

Biden will want to Restore virus travel restrictions Against foreign nationals arriving in the United States from Brazil, Britain, Ireland and much of Europe on Monday, according to reports, adding South Africa to the list as well.

The White House revealed details on Monday New American Property Order Defined to be signed by the President. This will increase the price preference threshold for domestic products before the government can buy from a non-US supplier.

China overtook the United States as the United States The leading destination in the world For new foreign direct investment last year, according to UN data released on Sunday.

A few days before the fourth quarter earnings, Baird Raised its price target Manufacturer of electric cars Tesla
TSLA,
+ 0.20%

To $ 728 per share from $ 488, saying “bias per share remained upward”, in a comment on Monday.

GameStop
GME,
+ 51.08%

stock Jumped 42% in pre-market tradingAfter soaring 51% on Friday. The profits came after short-selling firm Citron Research and speculative buyers organized on Reddit clashed around the video game retailer.

AMC
AMC,
17.79%

The stock Jumped 34% in pre-market trading, When the movie theater chain raised $ 917 million in debt to help it through the COVID-19 crisis.

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